Trusts

The attraction of the trust concept is straightforward: the trust is the most flexible financial instrument for making estate planning arrangements, short- or long-term, free from the restrictions of the legislation of the domicile of the settler.

Whatever individuals’ wishes may be for the future ownership, management, and enjoyment of their property, they can almost certainly be achieved by using a trust. The trust is also increasingly used in commercial structures, such as mutual funds and structured debt.

The attraction of Cayman as a jurisdiction in which to establish a trust is also clear. In recent years, as the popularity of the trust concept has grown worldwide, so have the cadres of experts in trust formation and administration in the Cayman Islands. Consequently, that expertise and more importantly, the legislation that has grown out of it, have attracted more trust business to the Cayman Islands.

The increasing complexity of the investment world and the difficulty in preserving wealth have made the trust particularly important as a means by which individuals can provide financial security for their families after death, even though they themselves may not be knowledgeable in investment matters.

The Special Trusts (Alternative Regime) Law (STAR) substantially extended Cayman’s trust planning framework. STAR allows for trusts for any purpose (charitable trusts, person trusts, and purpose trusts) as well as mixed trusts, provided they are lawful and not contrary to public policy.